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Published April 16, 2014, 10:05 AM

CHS officials continue to review status of proposed plant

CHS corporate officials continue to review the status of the proposed nitrogen fertilizer plant at Spiritwood, N.D., according to Carl Casale, CHS president and CEO. The latest information does not include a timeline for any future decisions.

By: Keith Norman, Forum News Service

CHS corporate officials continue to review the status of the proposed nitrogen fertilizer plant at Spiritwood, N.D., according to Carl Casale, CHS president and CEO. The latest information does not include a timeline for any future decisions.

“We’ve got some work to do, but this is very strategic for CHS,” he says. “We’re committed to finding the path forward. There is no higher priority for the company at this time than addressing this.”

The CHS nitrogen fertilizer project was first announced in September 2012 and has been under study by the corporation since. Casale said a planned “go-forward” decision on April 1 was delayed because bids received from the contractor selected for the project were higher than expected.

When originally announced, the project had an estimated cost of $1.2 billion. Estimates in January placed costs at about $1.8 billion. Officials with CHS would not comment on the current actual bid costs of the project.

If the project is built, it will utilize natural gas from the Oil Patch in western North Dakota to produce nitrogen farm fertilizer. It will likely be the largest construction project in the state’s history.

Casale says the project team had been asked to find ways to reduce overall construction costs. The company also retained a consultant to analyze the cost difference between earlier engineer’s estimates and actual bid costs.

Tim Skidmore, chief financial officer of CHS, is in discussion with the state of North Dakota concerning financial options for the project, Casale says. An earlier release from CHS estimated the project would contribute about $23 billion to the local and state economy over a 20-year period.

CHS is also continuing with the process of acquiring the necessary water and air-quality permits for the project. Craig Thorstenson, environmental engineer with the North Dakota Department of Health, says a public comment period concerning the plant’s emissions could begin in the next month. The 30-day comment period will allow the public to give its opinions on the plant’s possible air emissions, which include up to 200 tons of particulate matter per year.

Thorstenson says particulate matter is the dust from the fertilizer production process. Scrubbers will eliminate much of this material but about 200 tons per year will be emitted.

“Federal rules classify anything over 100 tons as a major source of emissions,” Thorstenson says. “It is still a smaller source than most power plants in the state.”

North Dakota regulations require the plant to utilize the best control on emission possible. Any emissions that cannot be controlled are covered by an air pollution control permit to construct, which will be considered by the North Dakota Department of Health after the public comment period. Once the permit is issued, construction must begin within 18 months.

A 3,000-gallon-per-minute pump test of the Spiritwood Aquifer is scheduled for next week, according to Geneva Kaiser, manager of Stutsman Rural Water District, which has applied for the water to sell to CHS.

The test will pump water at a rate of 3,000 gallons-per-minute around the clock for seven days. Water from the test will run into the James River.

Data collected during the test is analyzed and submitted to the North Dakota Water Commission by the end of May and will serve as the basis for any water permits issued for the project.

“Nobody wants to rush into a decision,” Kaiser says. “They want all the information they can get.”

Local economic development officials believe the project will be built.

“I’m still confident the project will proceed,” says Connie Ova, Jamestown/Stutsman Development Corp. CEO, during its board meeting Monday. “They just need to work through some things.”

Ova says any economic incentives CHS requires to make the project viable would be larger than anything that could be offered by the JSDC or the local governments.

Gary Riffe, JSDC president, says the project is significant to the region.

“What we’re all hoping for is that they see this as an important project,” he says. “What we hear is they want this project in North Dakota and at Jamestown.”

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